Inside Social Games

Don’t let the name fool you. This game is nothing like what you might think. Sorry, but there no flying cars, no Jetsons, and no space bass. As misleading as it may seem, Facebook game FutureGame does technically deal with the future, just not the distant future. It’s more like 30 seconds from now.

Sufficiently confused? Not surprising. FutureGame is actually a stock market type game, which at first glance seems very drab. Typically, games like this are simulations that let you build a portfolio and try to earn virtual points based on actual stock market data. But while FutureGame does utilize real data, it is nothing like that. The game, believe it or not, is basically a gambling game with a touch of educational value.

Wait… what? Gambling and education in the same sentence?

Okay, the educational aspect isn’t a built in feature, but it is something that should be utilized by players. The game is basically a guessing game in which you predict whether a particular stock, currency, or commodity will go up or down in the next 30 seconds. That’s all the game is about, but here’s the catch: Whenever you make a correct prediction you begin a “streak” and the bigger the streak, the bigger the payout. Yes, payout.

You can actually win cash and prizes. The developers at FutureGame.com offer prizes both daily and monthly for top streaks. For example, this month’s prize is a MacBook, and in order to win, you need to have the highest streak by the end of the month (thus pitting you against both the market and other players). Beyond prizes, there is a fiscal payout for streaks as well (see the image below). Of course, this is where the hard part comes in. You have to physically press the “cash out” button to claim your reward and end your streak. So here is the ever important question: Do you stay all in, or quit while you’re ahead?

Regardless of your choice, you don’t risk anything, which is something that cannot be said about the real stock market at the moment. However, this is where the aforementioned educational value comes into play. While you do have a 50/50 chance of getting something right, playing extensively or learning from real stock market trends may give you a better prediction knowledge. Just as with anything else, the more you practice the more you improve, thus you will start to see patterns, trends, and make better educated assessments, which in turn, increases your winning potential. Of course, you can always rely on luck, but this extra bit of learning certainly couldn’t hurt.

Overall, the game is nothing extravagant, but neither are slot machines (unless you count all the shiny, blinking lights). The key difference here, is you don’t have to put those coins into FutureGame to get a payout. The game is incredibly simple to pick up and play, and terribly, terribly addicting. Granted, the addiction is due in part to the allure of a $10,000 pay out, but also the competitive aspect. Remember, you’re not only competing against the market, but against other people as well for those daily and monthly prizes. It’s like combining eBay with Las Vegas except you’re not losing all your money.

A word of caution however: If you do have people that get addicted to gambling, you may want to keep them away from this app lest they never leave their room again.

Not too long ago, FooMojo, creators of the popular Facebook app Pokey, announced the closing of a $9.9 million Series A round led by SoftBank Capital. The company is focused on the virtual pet space, but not just on Facebook. Rather, the company develops such applications all over the web and for the iPhone as well.

Combined with the seed round it raised last year, the company has now raised $10.7 million in total. After the Series A round closed back in September, CEO Ron Hornbaker noted that the company was especially fortunate to be ahead of the market crash, and was no longer looking for further investment.

Masayoshi Son, CEO of SoftBank Corp. added, “Japan was the birthplace of the virtual pets phenomenon and I witnessed first hand, the amazing success of the Tamagotchi driven from the basic fulfillment of virtual companionship.” Son went on to say, “FooMojo has taken the model to new heights of realism and technology by creating virtual pets that evoke a strong emotional bond with owners and are portable across social networks and devices. FooMojo is creating the next-generation of virtual pets and I expect the company to lead the category.”

[via Virtual World News]

Earlier this month, there was discussion regarding the taxation of virtual assets in China. Unexpectedly, however, similar discussions have recently been happening in the US.

Apparently, there is a “gap” in the New York state budget, and in response to this, Governor David Patterson proposed a number of solutions. Most interesting of them all was the one dubbed the “iPod tax” that would impose both state and local taxes on “digitally delivered entertainment services.”

Essentially, this means that any and all downloadable content could be affected. This includes all major video game platforms, and could also possibly encompass virtual goods and currencies. It’s not clear what exactly will happen, but GamePolitics.com says:

“If you live in the state of New York, you could find yourself paying sales tax on downloadable content (DLC) for video games, beginning in 2009.

That’s because, much like the private sector, state and local governments have been hit hard by the current recession. In New York, Gov. David Paterson (D) has responded by proposing a budget that calls for layoffs, service cutbacks and new taxes, including one that will likely add to the cost of your DLC on Xbox 360, PS3, Wii or PC.”

Of course, this is all just speculation at the moment. The budget will still have to be approved by the legislature, but regardless of whether it passes or not, it is interesting to see this sort of suggestion appear at all.

[via Virtual Goods News]

Earlier this month, PlaySpan announced the launch of its virtual goods marketplace. The site will be comprised of items from dozens of different online games, and bring them together all in one place instead of creating separate virtual marketplaces for each specific game.

This new “PlaySpan Virtual Goods Marketplace” will sell the items from games such as EVE Online, Saga, War Rock, Knight Online, and others. Players will be able to visit the new marketplace regardless of the game they play and purchase each game’s virtual currency or the items they desire directly.

PlaySpan also announced recently that it had raised a $16.8 million round of funding. According to PlaySpan chief executive, Karl Mehta, this new site will be simple, secure, and offer plenty of payment methods with a potential customer base of over 100 million users. Furthermore, since the site sells items and currency directly with the permission of the game developers it supports, they can avoid the much of fraud, scams, and theft that can come in ad-hoc secondary markets.

As it stands now, supporting publishers include Aeria, CCP, GamersFirst, InixSoft, NHN, Ntreev, and Saga. A number of these are based in Asia where the virtual goods movement is strongest and most mature, thus making up a large portion of an industry now worth approximately $1.5 billion (based on Strategy Analytics).

[via VentureBeat]

It is far from uncommon for game developers to outsource to other companies and even freelancers in times of need, but in times past those needs tended to primarily be the creation of art and code assets. However, today, more and more aspects of game development are being handled by third party services, ranging from the monitoring of virtual goods transactions (PlaySpan) to the actual integration of social capabilities (J2Play).

While it isn’t limited specifically to social games, a company by the name of Nonoba has created very cool API for multiplayer games, including a new payments API. So who are they? Well, first and foremost Nonoba is a gaming community that allows you to play and compete online through various games, but more than that, Nonoba also allows Flash developers to upload, rate, and share their games with the world.

This is a company that provides a service that allows developers to focus strictly on game play and removes the trouble of building a robust multiplayer backends. “The Nonoba Multiplayer API” is combined with their “Nonoba Game Server” handles the heavy server connections, communication systems, and connecting the various players together. Nonoba hosts all of the server side code, which means that speed and latency are less an issue than they normally would be, thus making real-time as well as turn based games possible with this platform.

In addition, Nonoba also tracks all of the connections, databases, sockets, registrations, and so on so developers don’t have to worry about it. They even include lobbies, chat, ranking systems, as well as a plethora of other features. But what is most impressive is that it can scale to any reasonable size game you have (or whatever size it ends up growing too).

Also available is the payment API, and this is where Nonoba differentiates slightly from other similar services. As you know, there are a number of games that require payment of some sort, most of which are either subscription or virtual goods based. Regardless of the type, setting up a system like this is a whole new can of worms that a number of Flash developers have never had to deal with - and is a tremendous undertaking. Not only do you have to set up an entire payment system, but a means of tracking and reconciling all payments and purchases. Compound this with a large number of users and you can begin to see the headache that will soon entail.

As you have certainly guessed by now, this is where Nonoba sets all of this up for you, and it works regardless of whether your game is single or multiplayer. Revenues are split 70/30 with the developer taking the 70%, but considering the cost of developing something like this from scratch, it is probably well worth it (at least for a while).

The API also allows you to charge for anything in your game, including items, levels, or even the entire game itself. Your shops are set up for you, and you are free to embed your game on any other site besides Nonoba and it will work perfectly fine. The only downside, is that the only current provider is PayPal. It is claimed that more are coming soon, but at the moment, this is the only choice available.

Nonoba is most certainly a powerful set of APIs despite the type of game it is used for. The fact that game developers can come to Nonoba for not one, but two very powerful and often critical online gaming features is an impressive addition in and of itself. Long story short, companies like this means more quality games for the players and less headaches for the makers.

Owned and operated by the Finnish Sulake Corporation, Habbo Hotel, a virtual world game, has been host to a social network of teenagers for years. Since its inception back in 2000, the virtual goods based business has expanded to include communities across 31 countries in five continents.

The game allows players to create their own Hotel rooms and create a social space for themselves and their friends using furniture they buy with real currency. They can then travel around this virtual world to socialize with others within various “chat rooms.” Each room is either dubbed public or guest, the latter of which consists of a highly customized space created by a player who then has complete control over whom they admit. Public rooms, on the other hand, are created by Sulake themselves and are not customizable, but rather depict scenes such as restaurants, bars, clubs, etc. In addition, the free guest rooms also play host a number of mini-games such as Falling Furni, Quiz, and Wobble Squabble. Each game is hosted by the administrator and can reward winners various prizes such as new furniture.

The company became profitable this year, 2008, with revenues of $50 million. Habbo has 100 million registered users and there are 10 million active players each month.

Sulake has also released a mobile version of the service called Mini Friday that is nearing the 1 million registered user mark. Here’s what makes that number even better: Not only is the game restricted to users 18 and up, but it only works on the Nokia S60 series of mobile phones.

Inside Mini Friday, players can create their own avatar, customizing aspects such as gender, height, and clothing then move about and between rooms. As most of the rooms look to be bars, the chat is more mature, and players can talk between one another individually or “shout” and be heard by all.

Currently, the game is still in beta, and has been since 2006. Since that time, it has steadily grown in popularity, especially in areas such as Indonesia, and is expected to leave the testing phase soon.

Perhaps what is most interesting, however, is a comment noted in a VentureBeat article from Habbo Hotel co-founder Aapo Kyrola. While there is little to go on at this time, Kyrola did state that the company is working on an iPhone version of this application. He goes on to say that compared to the Nokia platform, the iPhone has been a significantly better experience.

[via VentureBeat]

Although it’s a huge and mature space in China, the virtual goods movement has solidified a foothold in the American gaming industry as a highly viable business means for online games. However, there is no easy task involved in the creation of a virtual goods infrastructure, and this difficulty creates a void that must be bridged before it becomes more prominent.

Knowing that a need exists, companies like Twofish seek to fulfill that need. The company has secured $4.5 million in funding which was recently announced at The Virtual Goods Summit in San Francisco.

Twofish has dubbed itself a “digital resource planning solution.” Usage of the Twofish infrastructure will allow developers to easily run virtual banks, track inventory, set up an e-commerce system as they see fit, and allow player transactions in real time.

For game developers, the purpose of outsourcing is to focus more on the virtual worlds and games which they are creating, as opposed to spending time on the more tedious back end development. Furthermore, the inclusion of Twofish features can not only allow for virtual goods’ based profits, but also provide users with greater customer security, and fraud prevention.

Lee Crawford, chief executive at Twofish, also points out that the technology gives real-time data back to the developers, allowing them to track what virtual goods are being sold as well as how much revenue is being generated through the various microtransactions being made ($.25 here, $.50 there). However, it is also worth noting that a virtual goods system is not right for everyone.

Based on a blog post on VentureBeat, chief executive of Outspark (an online games company), states that you would need to make at least $200,000 in revenue before you could consider adding any market system (be it primary or secondary markets of virtual goods). Nonetheless, the idea behind Twofish still seems to hold significant merit to the folks at as Triplepoint Capital, Rustic Canyon Ventures, and Venrock.

Santa Clara, California - based PlaySpan, founded in 2006, has just raised $16.8 million via Easton Capital Group, Menlo Mentures, Novel TMT Ventures, STIC and others, VentureBeat reports. The company plans to use the money to build out its virtual goods payment platform and transaction system for online games.

Many new free-to-play games that have little or no advertisers or subscription are making their income by selling various items and in-game upgrades to players as they need them. The cost is generally very cheap, but since the cost is so low, the volume of those transactions adds up very quickly. The trick is, online games need to have the infrastructure in order to do this, and that is where PlaySpan comes into the picture.

When it comes to virtual goods in games, there are two types of markets: Primary market and Secondary market. The more “common” market seen online today is the secondary markets where players sell goods to other players for real currency. However, a number of these sellers operate without the game developer’s permission. These are generally prevalent in places like China and Korea and consist of services such as the sale of virtual gold in World of Warcraft.

The problem, as you can surmise, is that it leaves the developer out of the picture, and creates a lot of opportunity for fraud, theft, and a general breakdown of in game economy. Of course, that isn’t to say that all secondary markets are bad. There are in fact companies that do acquire permission and work with game developers to mediate player to player transactions (i.e. LiveGamer) without any of the negative drawbacks.

Similarly, PlaySpan operates with permissions from developers, but instead of moderating a secondary market, they choose to focus on a primary market in which items are sold directly to the players themselves. In order to best do so, PlaySpan focuses on the needs of a player and tailors items to them based on what they need most in game. This can be based on any number prospects such as level, in-game wealth, current quests, etc. Whenever the situation arises, a player receives a prompt with the offer and can purchase it immediately by whatever means they desire. For every purchase made, PlaySpan receives about 10%.

Their payment method is fairly simple too. By acquiring the online payment company, PayByCash, PlaySpan offers users use up to 70 different ways to make purchases in 180 different countries. This includes money orders, game cards, and even cash. They even have their own pre-paid game card now that is accepted by over 200 online games.

With such a robust infrastructure, PlaySpan has gotten the attention of a number of different companies now (Aeria Games, Eve Online, Gala-Net, etc) and serves as a platform for over 60 unique online games. This equates to over 70 million gamers world wide.

[via VentureBeat]

$2 billion US dollars: That is the virtual goods market on free-to-play games. In light of that hefty chunk of change, Live Gamer recently announced its partnership with Acclaim, GoPets, and IAC’s InstantAction.com to create player-to-player, virtual marketplaces. These markets will play host to the transaction of real currency for virtual goods.

Of the three partners, GoPets took the first step with the launch of its closed beta on November 20^th. Following suit will be InstantAction with its games coming soon in December, and Acclaim launching the beta of its title “9Dragons” sometime during the first quarter of 2009.

An article from Virtual World News quotes Symbiosis Games (developers of GoPets) CEO, Erik Bethke, “We’re excited to fully realize our partnership with Live Gamer and offer our users the safest way to exchange virtual goods for real money online.” He goes on to state, “The added consumer confidence provided by the first truly legitimate online goods exchange is a tremendous asset to our international GoPets economy.”

This statement couldn’t be more accurate. One of the biggest concerns a vast number of people have when purchasing anything online is security; especially when dealing with something that isn’t exactly tangible. Moreover, there are countless virtual currency sellers in places such as China that offer exchange for real money, and anything helps broker international work in addition to better security is a god-send.

The system should be reliable too; based on an upgraded version of Live Gamer Exchange. Features affecting both the publisher and the consumer have been given a facelift with improved search capabilities and listings as well as (and possibly most important) a new multi-factor fraud screening engine.

Considering that Live Gamer has faceted hundreds of thousands of dollars worth of transactions and has the experience of managing an always on virtual economy, these new features are well founded. Andrew Schneider, president and co-founder of Live Gamer, states, “We’ve been able to address opportunities in the live economy and incorporate those learnings… Continued innovation on behalf of our clients and their end-users will always be our focus.”

That said, Live Gamer could very well turn out to be a great service. It’s impossible to say for sure how it will do, but good or bad, it will be interesting to see it unfold.

[via Virtual World News]

We all know China has a lot of people - 1.25 billion approximately. Of that 1.25 billion citizens, about 40 million play online games, and 80% of those have purchased virtual goods. According to 5173.com, this market has grown to about 9.36 billion yuan annually, which is about $1.37 billion in US currency. And that was just last year - a pretty impressive number by anyone’s standards.

Virtual World News recently posted that the Chinese government had imposed a 20% tax on any income generated through the trading of virtual currencies earlier this month. Apparently, this latest came about after the failed attempt two years ago to simply ban people from profiting off of virtual transactions. Of course, details on how this type of levy will be enforced are unclear.

For those that may not know, this all refers to the concept of virtual goods which are generally inexpensive, non-tangible items sold on the web. They range from avatars, virtual game items, animated gifs, game currency (i.e. gold), music themes, etc. They are often used by people to add personality, or an edge to the games and social networks they are a part of, and have skyrocketed in popularity over the past few years.

However, this new tax is affecting an enormous number of users. For example, any seller of a virtual currency (a subset of virtual goods) transaction must report to the Chinese tax agency and pay income taxes within seven days of the sale. However, based on the most recent post on Virtual World News, “officials are still unsure of what exactly should be taxed or how….”

Regardless, the platform providers seem to be loving the idea, as it discourages the sale of goods within their virtual worlds by third parties (such as reselling virtual currency in an MMO). The players, on the other hand, are not as pleased with the result (increased costs).

One of the major titles in which virtual currency is sold is Blizzard Entertainment’s World of Warcraft. There are a number of gold selling companies that do nothing but acquire large sums of gold and sell it to players for profit. How are the WoW markets being affected? In a recent article in the Shaighai Daily, one WoW player states, “The price of gold has surged recently and its difficult to purchase enough gold even if you have the money sometimes.”